The Contract for Sale of Land is the document that makes or breaks a property transaction in New South Wales. It is the legal foundation for every residential, commercial and off-the-plan sale.
Whether you are buying or selling, the contract sets out the price, timing, conditions and obligations of each party. Once exchanged, it becomes binding — and mistakes or omissions can be expensive to unwind.
This article explains what the contract must contain, key terms to understand, and why having a lawyer review or prepare it is essential.
1. What Is the Contract for Sale of Land?
In NSW, property ownership transfers through a legal process called conveyancing. The contract sits at the centre of that process.
The document records the agreed purchase price, the property description, and the terms of sale. Once both parties sign identical copies and the contracts are exchanged, it becomes a binding agreement.
The contract is governed primarily by the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation 2022 (NSW). It is usually prepared by the seller’s lawyer and reviewed by the buyer’s lawyer before exchange.
You cannot advertise or offer a residential property for sale without a draft contract ready for inspection — a requirement under the Property and Stock Agents Regulation 2022 (NSW).
2. Mandatory Inclusions
Schedule 1 of the Conveyancing (Sale of Land) Regulation 2022 (NSW) sets out the documents that must be attached to every residential contract. These include:
A current title search and deposited plan;
A Section 10.7 Planning Certificate issued by council;
A drainage and sewerage diagram;
Copies of any easements, covenants, restrictions or other dealings recorded on the title;
For strata or community title property – the strata plan, by-laws, and relevant certificates.
If a required document is missing or inaccurate, the buyer may have the right to rescind the contract before completion.
For sellers, accuracy is critical — incomplete disclosure can delay exchange or invalidate the sale. For buyers, reviewing these attachments reveals crucial information about zoning, easements, and potential restrictions.
3. Key Clauses to Understand
The standard form used in NSW (Law Society/REINSW edition) contains dozens of clauses. Some set out the basic contractual procedures and who is responsible for doing what; others can have serious financial impact if misunderstood.
Price and Deposit
The purchase price is fixed at exchange.
The deposit — typically 10% — is paid when contracts are exchanged, unless the parties agree to a lesser amount.
Deposits are held in trust and applied towards the purchase price at settlement.
Inclusions and Exclusions
Fixtures (things attached to the property) automatically form part of the sale, while movable items do not.
Disputes commonly arise over appliances, light fittings or outdoor items.
The contract should list inclusions and exclusions clearly to avoid ambiguity.
Cooling-Off Period
Buyers of residential property usually receive a five-business-day cooling-off period, allowing them to withdraw for any reason.
If rescinded, the buyer forfeits 0.25% of the purchase price.
The cooling-off right can be waived with a Section 66W Certificate signed by the buyer’s solicitor — a common practice in competitive markets.
Special Conditions
Lawyers can insert special conditions to adapt the contract to the parties’ needs — for example, subject to finance, early access, or completion on a specific date.
Poorly drafted special conditions are a common source of dispute. They should be precise, lawful, and consistent with the standard terms.
GST
GST generally does not apply to the sale of existing residential property, but may apply to new or commercial property.
The contract must specify whether the price is inclusive or exclusive of GST and who is responsible for remitting it.
Settlement
Unless varied, the standard settlement period in NSW is 42 days (six weeks) after exchange.
During this time, searches, adjustments and mortgage arrangements are finalised.
Late settlement can attract interest or default penalties, so timelines matter.
Vacant Possession or Subject to Tenancy
The contract must specify whether the property will be sold vacant or with a tenant in place.
The status determines access rights, notice periods, and obligations at settlement.
4. Nuances and Traps to Be Aware Of
Not all contracts are alike. Even the standard form can be amended, and small changes can alter the balance of risk.
Off-the-plan contracts often include extended sunset dates and developer variation clauses — buyers should check termination and refund rights.
“As-is” sales may exclude certain warranties or shift risk to the buyer before completion.
Misstated property boundaries or easements may justify rescission if undisclosed.
Finance clauses are not standard in NSW contracts; they must be negotiated expressly.
Electronic exchange and settlement (via PEXA) have modernised the process, but the same legal formalities apply — an unsigned or incorrectly dated contract can still be invalid.
Understanding these nuances is where experienced legal review adds real value.
5. Exchange of Contracts (Brief Overview)
A contract does not become binding until exchange. This means both parties have signed identical copies, and those copies have been dated and swapped.
At exchange:
Your lawyer ensures exchange occurs correctly, that any variations are initialled, and that all pages align. A simple administrative error — a missing signature, page or annexure — can jeopardise enforceability.
For more on the timing and legal effect of exchange, see Cooling-Off and Settlement Periods in NSW Conveyancing.
6. Common Contract Issues
Problems often arise from avoidable drafting or disclosure errors, such as:
Missing prescribed documents;
Outdated title or plan searches;
Vague or conflicting special conditions;
Incorrect GST treatment;
Failure to specify tenancy details;
Discrepancies between inclusions listed in the contract and what remains on site.
An experienced property lawyer checks for these before exchange, preventing disputes that can derail settlement or lead to costly litigation.
7. Why Every Contract Should Be Reviewed by a Lawyer
Even when a sale uses a “standard” form, every property and every transaction is unique.
A solicitor can:
Identify risks in the documents attached to the contract;
Explain the effect of key clauses in plain English;
Negotiate amendments or special conditions to protect your interests;
Ensure compliance with NSW disclosure and exchange laws;
Manage issues that arise before or after settlement.
A licensed conveyancer can manage the mechanics of settlement, but cannot provide broader legal advice or represent you if a dispute arises. Having a lawyer involved from the start provides continuity and complete legal protection.
8. Conclusion
The Contract for Sale is more than just paperwork — it defines the deal. Every term, schedule and annexure carries legal weight.
Having it properly drafted or reviewed by a solicitor ensures the contract reflects the parties’ true agreement, meets NSW legal requirements, and avoids costly surprises.
Speak to a specialist property lawyer
Our property team includes multiple Accredited Specialists in Property Law who review, draft and negotiate Contracts for Sale across Sydney and NSW. If you’re buying or selling property, give us a call or submit an enquiry now to speak with one of our conveyancing specialists.
